Audicus Thinks It Can Be the Warby Parker of Hearing Aids E-tailing
Devices that could improve sound for the hearing impaired are a few mouse-clicks away.
New York-based startup Audicus wants to cut out the middleman and position itself as the Warby Parker for hearing aid sales online.
Audicus founder Patrick Freuler says a pair of hearing aids can cost as much as $7,000 and might not be covered by insurance. “It ends up being a very expensive thing to buy, largely paid out of pocket,” he says.
Those prices, Freuler says, may have less to do about the hardware and technology and more about paying the intermediaries between the consumer and the product. That’s why Audicus offers a delivery model that circumvents such middlemen, he says, dropping that price from the thousands of dollars to about $600 per ear. “It is analogous to what you see in the eyewear space with Warby Parker, and in the contacts industry with 1-800 Contacts,” he says.
Freuler believes offering an online way to buy hearing aids, at lower cost, could increase their appeal among the people who need them. “There’s approximately 40 million people living with hearing loss in the U.S.,” but only 10 million have hearing aids, he says. “There’s 30 million people roaming around with hearing loss but without any assistance.”
Many of Audicus’ customers are aged 55 and older, when people frequently first begin noticing hearing impairments. Freuler says many of these folks are baby boomers who are rather tech savvy. “That demographic is a very active user on the Web,” he says.
Looking to cater to such consumers, Freuler founded Audicus in 2012. He bootstrapped operations until this past spring when the startup raised $1.6 million in convertible notes from Middleland Capital, Howzat Partners, and other investors. Audicus is generating revenue, Freuler says, with a run rate of about $1.5 million to $2 million at the time of the funding round.
The hearing device market is highly fragmented, he says, with patients typically visiting Mom-and-Pop type audiologist clinics for exams and to order hearing aids.
Patients with hearing loss choose aids that either are worn behind the ear or go in the ear canal itself. The latter tends to be for more severe cases. Audicus sells devices for people who suffer from mild to profound hearing loss.
Surprisingly, Freuler asserts that audiologists have not pushed back much against online sellers of hearing technology, as they seem to serve different demographics of users—for now.
Much of Audicus’ client base is made up of first-time hearing aid buyers, he says, who may be more inclined to shop online. (Patients still must get diagnosed by a doctor or audiologist to assess what type of hearing aid they might need.)
Freuler compares his company’s service to the disruption that came to the travel industry—bypassing middlemen to directly connect consumers with the products they want. “Anyone with an Internet connection and e-mail can purchase hearing aids from us,” he says.
Freuler, a graduate of the Massachusetts Institute of Technology with a master’s in engineering, says he spent a few years investing in health care companies in Europe. That led him to the medical devices space and the hearing industry. The rise of wearable devices over the last 18 months, he says, has helped advance the development of smaller form factors for some hearing aids. “With the advent of low-energy Bluetooth, you started seeing far more interesting features you can start implementing,” he says.
That has opened the door for more customization and more manufacturers producing hearing technology, Freuler says, which he believes could mean more diversity in hearing aids available online..
Looking ahead to 2015, Freuler says Audicus is working with partner companies to develop software for hearing rehabilitation training.
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